Marketing: Mitigating the Product and the Consumer
The definition of marketing is subjective. However, in a holistic business perspective, marketing is how a firm distributes and sells their products to end-users or consumers. A consumer who uses a product sees the value of such, and this is how companies enter the picture in making a particular product available for purchase by a target market. Furthermore, a firm’s competitive advantage sets it apart from its plethora of competitors, which battle for market share in their respective industry. Let us discuss the core elements that comprise marketing.
Each core concept of marketing is essential in making a product feasible enough for a mass consumption. A product is the good purchased by the buyer. It may be a tangible product or a service offered by the company. The product decision includes aspects of brand name, functionality, quality, packaging, and warranty. For a company to create a product, it must first constitute an idea in which the product will emerge and eventually materialize. A brand manager is always at the helm of every product development in mind, under the tutelage of the marketing manager who oversees a new product in tow.
With a product comes a corresponding price for it. A price is the cost of a product which a buyer is willing to pay. Pricing decisions always consider account profit margins that affect the pricing feedback of the entirety of its market and its competitors. Pricing includes allowances, financing, leasing options, and discounts as well. Whenever a consumer finds a price for a product too high, the consumer will resort in buying substitute or alternative products instead. This will result into a sales liability and profit loss.
Yet whenever the company decides to reduce a product’s price, this will not yield sales and profitability will suffer, which leads us to the supply factor that primarily affects the price of a certain product. The supply greatly influences the price of a product because production is driven by the number of people that are willing to pay the certain value for a product. This is what we call price discrimination. Pricing objectives determines the stabilization of price and margin which gives the company the factual basis for pricing in order to meet competition and achieve the target market share.
Most importantly, pricing objectives gives the company the pricing initiative in order to attain its target return of investment. Cost considerations also play a role in pricing decisions. The cost of production, promotion, and profits is what primarily covers the cost of a product. One of the most conventional practices in costing is the cost-oriented pricing which enables companies for sustainable market expansion. Product specifications are considered in pricing decisions as well. A company should have a standard general model in order to sustain its profit margin.
The thrust of promotion is advertising. Advertising the product brings a lot to the table. Promotion decisions are matters that concern the constant communication with potential consumers which can be then company’s cash cows in the future. In creating promotion decisions, a break-even analysis is a requisite due to the fact that promotion costs are higher compared to the product price itself. A customer’s value is a helpful aid in ascertaining if more customers are worth the promotion budget that will bring them into the fold.
For a company to build a positive image and draw prospects, they nurture relationships with potential consumers, so as to retain them as their cash cows. The promotion mix is a useful tool in determining whether the promotion decisions are efficient or not. It consists of five elements namely: advertising, sales promotion, public relations, direct markets, and personal selling. These elements are aimed at the goal of marketing communication programs which integrate the elements of the promotion mix in order to convey a standard message to consumers. Promotion decisions are created in order to attain loyalty from the consumers.
Relationship with distributors is also important in conveying the company’s standard advertising message to the consumers. A place or a distribution channel is essential because this is where a consumer can realize a product. Placement decisions are matters concerning apt distribution channels with the purpose of delivering the product to the consumers. Logistical and transactional tasks are performed by a company’s distribution system. The distribution system involves a number of personnel which has the sole task of delivering the product to consumers (Kotler, 2006).